What change to your home would make you happiest? Most people would say more space – yet people dramatically overestimate the effect more space in their homes will have on their overall happiness, research from Hact has found.

The organisation studied the impact common housing problems have on residents' overall happiness and found the seven conditions that most affect it are:

(The figures on the right are essentially the bag of money you would need to give people each year to make them as happy as they were before the dog-owning heavy metal fans with newborn triplets moved in next door.)

More space – despite being the improvement that most people say they want in a new home – did not even feature in the list.

The study was conducted by Hact and Daniel Fujiwara from the London School of Economics, who helped establish the government's approach to measuring wellbeing.

The findings shows the impact housing problems have on people's overall life happiness – not just their happiness with their home, so provide a far broader look at the impact of housing conditions on individuals and communities.

The compensation required may also not be what people say they would be willing accept if asked in a survey (so it does not mean that landlords can increase the rent by £1,068 a year after fixing some damp), but it would represent a good estimate of the money required to return their life satisfaction levels to what it would be like without experiencing these problems.

Hact hopes the results can help housing providers decide which areas they should focus their resources on. If they can understand which improvements will have the greatest impact on overall happiness, they can then spend money more efficiently on fixing the problems that will make the biggest difference for the tenants.

If landlords had previously followed residents' suggestions about what would make them happier and opted to prioritise space at the expense of noise insulation, they would actually have a negative effect on a residents' overall happiness – despite it being what most said would make them happiest.